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Dava Pharmaceuticals to Pay $11 Million to Settle Whistleblower Suit

The Justice Department announced that Dava Pharmaceuticals (“Dava”) has agreed to pay $11 million to settle a qui tam, or whistleblower, suit alleging that it violated the False Claims Act.

The whistleblower, Jim Conrad, alleged that, between October 1, 2005 and September 30, 2009, Dava knowingly underpaid its drug rebate obligations under the Medicaid Prescription Drug Rebate Program (“Rebate Program”). Under the Rebate Program, drug companies are required to make quarterly rebate payments to state Medicaid programs based on whether a drug is a name brand or generic drug, and the difference between what the Medicaid program paid and the prices paid by other purchasers.

According to the complaint, in order to decrease the rebate payments due from Dava, Dava treated its versions of the drugs cefdinir, clarithromycin and methotrexate as generic rather than name brand drugs. The complaint also alleged that Dava incorrectly calculated the average manufacturer prices for these same drugs.

The settlement resolved a qui tam action that was filed in the United States District Court for the District of Maryland. Under the terms of the settlement, the United States government will receive $5.7 million and Medicaid participating states will receive over $5 million. The whistleblower will receive 15 percent of the settlement proceeds as a reward.

If you have any firsthand knowledge, information, or evidence related to any federal, state, county or city government fraud, you should speak with an experienced qui tam lawyer who can help you understand your legal rights and help you obtain the compensation you deserve.

If you have a claim, contact the Florida whistleblower attorneys at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or e-mail kelly@mccaberabin.com.

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